This is the accessible text file for GAO report number GAO-14-558
entitled 'Media Ownership: FCC Should Review the Effects of
Broadcaster Agreements on Its Media Policy Goals' which was released
on July 28, 2014.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as
part of a longer term project to improve GAO products' accessibility.
Every attempt has been made to maintain the structural and data
integrity of the original printed product. Accessibility features,
such as text descriptions of tables, consecutively numbered footnotes
placed at the end of the file, and the text of agency comment letters,
are provided but may not exactly duplicate the presentation or format
of the printed version. The portable document format (PDF) file is an
exact electronic replica of the printed version. We welcome your
feedback. Please E-mail your comments regarding the contents or
accessibility features of this document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States Government Accountability Office:
GAO:
Report to the Chairman, Committee on Commerce, Science, and
Transportation, U.S. Senate:
June 2014:
Media Ownership:
FCC Should Review the Effects of Broadcaster Agreements on Its Media
Policy Goals:
GAO-14-558:
GAO Highlights:
Highlights of GAO-14-558, a report to the Chairman, Committee on
Commerce, Science, and Transportation, U.S. Senate.
Why GAO Did This Study:
Local television stations play an important role in educating,
entertaining, and informing the citizens they serve. FCC limits the
number of television stations an entity can own or control to advance
its media policy goals of competition, localism, and diversity.
Competing television stations are entering into agreements to share or
outsource services, and some policymakers are concerned about the
effects of these agreements on competition and programming.
GAO was asked to review issues related to broadcaster agreements. This
report examines (1) the uses and prevalence of broadcaster agreements;
(2) stakeholders' views on the effects of broadcaster agreements; and
(3) the extent, if at all, that FCC has regulated these agreements.
To address these objectives, GAO reviewed relevant FCC proceedings;
conducted a literature review; interviewed officials from FCC,
industry, and consumer associations; and conducted nongeneralizable
case studies in 6 markets (3 with agreements and 3 without) selected
from small and medium-sized markets.
What GAO Found:
Local television stations use broadcaster agreements to share services
with one another, but data are limited on the prevalence of these
agreements. Stations use agreements to share or outsource a range of
services, such as selling advertising time and producing local news.
Agreements are referred to by a variety of names and two—joint sales
agreements and local marketing agreements—have regulatory definitions;
other types of agreements have commonly been referred to as shared
service agreements or local news service agreements. Stations may
participate in more than one type of agreement. Federal Communications
Commission (FCC) officials and industry representatives could not
identify a central data source that tracks all broadcaster agreements.
Station owners and financial analysts said that agreements are more
prevalent in small markets because they have lower advertising
revenues than large markets. Further, FCC officials and stakeholders
said that agreements are becoming more prevalent, and stakeholders
stated that economic factors, including declining advertising
revenues, drive the use of agreements.
Stakeholders expressed mixed views on the effects of broadcaster
agreements. Consumer groups raised concerns that agreements in which
stations share news resources can lead to duplicative content in local
newscasts. Station owners counter that the agreements are needed to
allow some stations to continue providing news and allow other
stations that previously did not provide news to begin doing so. In
addition, some agreements include provisions that allow stations to
jointly negotiate for their signals to be carried by cable and
satellite providers. Cable and satellite providers argue that these
agreements increase stations' negotiating leverage and thereby
contribute to higher prices for cable and satellite service. In
contrast, station owners counter that these concerns are overstated.
Comprehensive data are not available to evaluate this issue, because
the negotiations are subject to nondisclosure agreements, and there is
no data source identifying which stations participate in agreements.
FCC evaluates broadcaster agreements that occur in the context of a
merger or acquisition, but it has not collected data or completed a
review to understand the use and effects of broadcaster agreements.
FCC's recent regulatory approach has been to evaluate broadcaster
agreements that occur as part of a merger or acquisition and to
propose specific remedies as needed. To promote its media policy goals
of competition, localism, and diversity, FCC established media
ownership rules that limit the number of stations an entity can own or
control in a local market. Station owners and consumer groups said
that broadcaster agreements are used in situations where common
ownership of stations is prohibited by FCC's media ownership rules.
FCC has stated that it is unable to determine the extent to which
broadcaster agreements affect its policy goals and media ownership
rules. Specifically, FCC does not collect data and has not completed a
review on the prevalence of agreements, how they are used, or their
effects on its policy goals and media ownership rules. Yet federal
standards for internal control note the importance of agencies' having
information that may affect their goals. Without data and a fact-based
analysis of how agreements are used, FCC cannot ensure that its
current and future policies on broadcaster agreements serve the public
interest.
What GAO Recommends:
FCC should determine whether it needs to collect additional data to
understand the prevalence and context of broadcast agreements and
whether broadcaster agreements affect its media policy goals of
competition, localism, and diversity. FCC agreed with the
recommendation and noted that it has taken initial steps to address
the recommendation, including proposing disclosure of sharing
agreements.
View [hyperlink, http://www.gao.gov/products/GAO-14-558]. For more
information, contact Mark L. Goldstein at (202) 512-2834 or
goldsteinm@gao.gov.
[End of section]
Contents:
Letter:
Background:
Television Stations Are Increasingly Sharing Services through a
Variety of Broadcaster Agreements, but Data on the Prevalence of These
Agreements Are Limited:
Stakeholders Have Mixed Views on the Effects of Broadcaster Agreements
on Television Programming and the Subscription Video Industry:
FCC Has Not Completed a Review of the Use and Impacts of Broadcaster
Agreements:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Federal Communications Commission:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Common Types of Services Provided under Different Broadcaster
Agreements:
Table 2: Percentage of Full-Power Commercial and Satellite Stations
with a Joint Sales Agreement (JSA) or Local Marketing Agreement (LMA),
or Both, by Designated Market Area (DMA), as of February 6, 2014:
Table 3: Average Local Television Stations' Revenue by Designated
Market Area (DMA) in 2011:
Figures:
Figure 1: Television-Programming Distribution Flow:
Figure 2: Example of a Merger-Generated Shared Service Agreement:
Abbreviations:
DMA: designated market area:
DOJ: Department of Justice:
FCC: Federal Communications Commission:
JSA: joint sales agreement:
LMA: local marketing agreement:
LNS: local news service agreement:
MVPD: multichannel video programming distributor:
RTDNA: Radio Television Digital News Association:
SSA: shared service agreement:
[End of section]
United States Government Accountability Office:
GAO:
441 G St. N.W.
Washington, DC 20548:
June 27, 2014:
The Honorable John D. Rockefeller IV:
Chairman:
Committee on Commerce, Science, and Transportation:
United States Senate:
Dear Mr. Chairman:
Local television stations play an important role in educating,
entertaining, and informing the citizens they serve. Congress and the
Federal Communications Commission (FCC) have recognized the importance
of this role by allowing local television stations to use the public
airwaves to broadcast their signals, and by giving stations specific
rights with respect to carriage of their broadcast signals on cable,
satellite, and other subscription video services. In return, Congress
and FCC have established certain obligations for local television
stations, such as requiring that stations operate in the public
interest. The laws and regulations outlining how local television
stations should serve the public interest have evolved over time and
become less prescriptive. However, three long-standing policy goals
have guided FCC's regulation of stations: competition, localism, and
diversity. To advance these policy goals, Congress empowered FCC, and
FCC has implemented broadcast ownership rules that limit the number of
stations an entity can own or control locally and nationally. Since
these rules were established, the media landscape has evolved,
resulting in the proliferation of cable networks and Internet outlets,
to provide citizens a broader array of content than was once the case.
This increase in media competition has presented economic challenges
for local television stations. In some cases, stations have entered
into broadcaster agreements that allow them to share resources with
other stations or contract out certain services. However, some
policymakers and public interest groups have expressed concerns that
such agreements allow competing stations to collaborate, avoid FCC's
media ownership limits, and could negatively affect FCC's policy goals
of competition, localism, and diversity.
You asked us to review issues related to the use of broadcaster
agreements. This report reviews (1) what is known about the uses and
prevalence of broadcaster agreements; (2) stakeholders' views on the
effects of broadcaster agreements on programming and the subscription
video industry; and (3) the extent, if at all, that FCC has regulated
these agreements.
To address these objectives, we conducted a literature review that
included relevant FCC regulations and rulemakings, prior GAO reports,
academic studies, industry and advocacy reports, and media articles.
We verified information from the literature review through interviews
with FCC and Department of Justice (DOJ) officials. We also
interviewed a variety of stakeholders that included: representatives
of broadcast networks; local television station owners; cable,
satellite, and other subscription video service providers; trade
associations; labor groups; consumer groups; financial analysts; and
other individuals with knowledge of the broadcast industry. We
selected local television station owners and subscription video
service providers that filed comments in FCC's 2010 media ownership
proceeding and that varied in the number of stations they owned or the
number of subscribers they served, respectively; we selected other
stakeholders by reviewing prior GAO reports, academic studies, and
comments filed in FCC media-ownership and related proceedings, and
through recommendations from other interviewees.
To assess how broadcaster agreements are used in the television
industry, we conducted nongeneralizable case studies of six markets
(three in which local stations used broadcaster agreements and three
in which they did not) to understand how agreements were used in
specific markets and obtain the perspective of the various station
owners in those markets; we selected the case study markets from small
and medium-sized markets.[Footnote 1] To assess what is known about
the prevalence of broadcaster agreements, we interviewed stakeholders
about the comprehensiveness of data collected by FCC, private-sector,
public-interest, and academic sources on the number of broadcaster
agreements nationwide. In addition, we acquired data from BIA/Kelsey,
a market-research firm, to assess the prevalence of certain types of
agreements, the stations involved in the agreements, and the size of
the markets served by the stations. We tested the reliability of BIA's
data by reviewing stakeholder opinions on the reliability and accuracy
of the data, reviewing existing information about the data, and
obtaining information from BIA officials about how they collect the
data; we found the data sufficiently reliable for our purposes.
To determine stakeholders' views on the effects of broadcaster
agreements on programming and the subscription video industry, we
reviewed FCC dockets and interviewed representatives of broadcast
networks; local television station owners; cable, satellite, and other
subscription video service providers; trade associations; labor
groups; consumer groups; financial analysts; and other individuals
with knowledge of the broadcast industry to collect their arguments
and any supporting studies and data on the effects of broadcaster
agreements. To determine the extent to which FCC has regulated
broadcaster agreements, we reviewed relevant FCC dockets and rulings
and interviewed FCC officials. See appendix I for more information
about our scope and methodology.
We conducted this performance audit from July 2013 to June 2014 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
Television Broadcast Industry:
Typically, households receive television programming through over-the-
air broadcasts or a subscription video service. Broadcast television
provides free over-the-air programming to the public through local
television stations; according to FCC, almost 10 percent of households
exclusively rely on over-the-air television. In contrast, consumers
pay fees to video providers, including cable operators, satellite
providers, or telecommunications companies--collectively referred to
as multichannel video programming distributors (MVPD)--for
subscription video service that includes local television stations as
well as cable networks, such as CNN and ESPN. Television broadcast
stations are licensed by FCC and are permitted to transmit a video
broadcast signal on a specific radio frequency in a particular area
and at a particular strength.
Television stations produce, acquire, and distribute programming. Some
stations are owned by or affiliated with one of the four major
broadcast networks (ABC, CBS, FOX, and NBC). If a local station is
owned and operated by a network, it is referred to as an "owned and
operated" station; if it is independently owned but affiliated with
the network, it is referred to as an affiliate station. Owned and
operated and affiliated stations carry network programming and network-
inserted advertisements during specific time periods. For example, a
station that is affiliated with FOX has an agreement with the network
that allows it to show FOX programs at particular times of the day.
Aside from the network-furnished programming, including prime time
shows, afternoon soap operas, national news programs, and sports,
local stations fill in the rest of the week's programming time with
local programming (such as local news) and syndicated programming.
[Footnote 2] In addition, there are independent stations that are
neither owned by nor affiliated with a broadcast network. Figure 1
illustrates how television programming is distributed, including
broadcast and cable network programming.
Figure 1: Television-Programming Distribution Flow:
[Refer to PDF for image: illustration]
Content producers (e.g., Sony, Disney) to:
Broadcast network (e.g., CBS, FOX);
Cable networks (e.g., CNN, ESPN, HBO);
Television station.
Broadcast network (e.g., CBS, FOX) to:
Television station.
Cable networks (e.g., CNN, ESPN, HBO) to:
Multichannel Video Programming Distributor (e.g., Comcast, DirecTV,
AT&T).
Television station to:
Multichannel Video Programming Distributor (e.g., Comcast, DirecTV,
AT&T);
Households.
Multichannel Video Programming Distributor (e.g., Comcast, DirecTV,
AT&T) to:
Households.
Source: GAO.
[End of figure]
Local commercial television stations earn the majority of their
revenue by selling advertising time.[Footnote 3] In particular,
advertising aired during local news represents a substantial portion
of a local commercial station's revenue. According to the 2013 Radio
Television Digital News Association (RTDNA)/Hofstra University survey
of 1,377 television stations, news represented an average of about 49
percent of station revenue, with that percentage increasing as market
size decreased.[Footnote 4] The survey also found that of the stations
surveyed, a total of 717 stations provided their own local news
programming, and 235 stations received and aired news produced by
another station. Many stations also receive compensation from MVPDs,
known as retransmission consent, which is discussed later in this
section.
Local broadcast television remains an important source of news for
Americans; however, consumers are also getting their news from cable
news networks, such as CNN, as well as online via computers and mobile
devices. According to the Pew Research Center's analysis of 2013
Nielsen data, over the course of a month, 71 percent of U.S. adults
watched local television news, 65 percent watched network news, and 38
percent watched cable news.[Footnote 5] However, the audience for
local news has declined since 2007, with viewership down 3 percent for
morning newscasts, 12 percent for early evening newscasts, and 17
percent for late night newscasts.[Footnote 6] In addition, more
Americans are also getting their news online via desktop and laptop
computers or a mobile device. For example, according to another Pew
Research Center report, in 2013, 82 percent of Americans said they
used a desktop or laptop computer to access news, whereas 54 percent
said they accessed it on a mobile device (cell phone or tablet).
[Footnote 7]
Regulatory Environment:
FCC assigns licenses for television stations to use the airwaves
expressly on the condition that licensees serve the public interest
and are responsive to the needs of the local community. Section 310 of
the Communications Act of 1934[Footnote 8] outlines the limitations on
holding and transferring broadcast licenses. For example, section
310(d) requires prior Commission approval before a license is assigned
or transferred; when FCC is reviewing an application for a license
assignment or transfer, it must determine whether the public interest,
convenience, and necessity will be served by granting the
application.[Footnote 9] Toward this end, FCC has established three
policy goals: [Footnote 10]
* Competition. FCC seeks to create a marketplace in which broadcast
programming meets the needs of consumers and has stated that
competition drives stations to invest in better local programming.
When reviewing competition in local television markets, FCC considers
competition for viewers and advertisers.[Footnote 11]
* Localism. FCC seeks to ensure that each station meets the needs and
issues of the community that it is licensed to serve with the
programming that it offers.
* Diversity. FCC seeks to maintain and enhance diversity based on the
idea that diverse ownership among media outlets increases the number
of viewpoints in broadcast content compared to what would otherwise be
the case in a more concentrated ownership structure.[Footnote 12]
To advance these policy goals, Congress empowered FCC, and FCC has
implemented rules that limit the number of stations an entity can own
or control locally and nationally.
* Local television ownership limit.[Footnote 13] Under the local
television ownership limit, a single entity can own two television
stations in the same designated market area (DMA)[Footnote 14] if (1)
at least one of the stations is not ranked among the top-four stations
in terms of audience share and (2) at least eight independently owned
and operating full-power commercial or noncommercial television
stations would remain in the DMA.[Footnote 15] An existing licensee of
a failed, failing, or unbuilt television station may seek a waiver of
the rule.[Footnote 16]
* National television ownership cap.[Footnote 17] Subject to
compliance with other ownership rules, a single entity can own any
number of television stations nationwide as long as the stations
collectively reach no more than 39 percent of national television
households.
* Cross-ownership limits. FCC has also established rules limiting
cross-ownership of media outlets, such as a newspaper and television
station or a radio and television station in the same market.[Footnote
18] For example, the newspaper/broadcast cross-ownership rule
prohibits ownership of a daily newspaper and television stations that
serve the same market.
FCC developed attribution rules to determine what interests should be
counted when applying these media ownership limits.[Footnote 19] FCC's
attribution rules seek to identify those interests in or relationships
to licensees that confer on their holders a degree of influence such
that the holders have a realistic potential to affect the programming
decisions or other core operating functions of licensees.[Footnote 20]
If an entity, such as a station ownership group, is found to have an
attributable interest in a station, that station would be included
when determining whether the entity has exceeded FCC's ownership
limits.
FCC has several carriage and programming rules that are designed to
support the provision of local content by local television stations.
These rules set forth the conditions under which MVPDs carry stations'
content. Some key rules that affect carriage and programming include:
* Must carry and carry-one carry-all.[Footnote 21] The must carry and
carry-one carry-all rules address the right of television broadcast
stations to have their signals carried by MVPDs serving their markets.
Stations that select must-carry or carry-one carry-all status must be
carried by the MVPDs serving the station's market, but receive no
compensation from the MVPDs.
* Retransmission consent.[Footnote 22] Retransmission consent refers
to permission allowing an MVPD to retransmit a station's signal when
the station chooses not to elect carriage through the must carry or
carry-one carry-all rules. By opting for retransmission consent,
stations give up the guarantee of carriage in exchange for the right
to negotiate for the terms of carriage, including potential
compensation. Retransmission rights are negotiated directly between a
station and the MVPD. We have previously found that after the 1992 Act
was enacted, negotiations for retransmission consent generally
involved "in kind" compensation to local broadcasters, such as
carriage of new, affiliated cable networks.[Footnote 23] However, in
recent years, financial compensation has become more common and
retransmission fees received by local stations have increased.
By statute, FCC is required to review its media ownership rules every
4 years--the quadrennial review--and determine whether any such rules
remain necessary in the public interest.[Footnote 24]
Television Stations Are Increasingly Sharing Services through a
Variety of Broadcaster Agreements, but Data on the Prevalence of These
Agreements Are Limited:
Television Stations Can Share a Variety of Services through
Broadcaster Agreements:
Television stations can enter into agreements with other stations to
share or provide a variety of services. The agreements between
stations can involve either two or more stations sharing a resource or
one station providing a service to another station. Common services
that can be shared or provided between stations include:
* News resources. Stations can enter into an agreement to share news-
gathering resources, such as helicopters, reporters, cameramen, video
footage, and graphics. For example, in 2009, three television stations
in Phoenix, Arizona, entered into an agreement to share one news
helicopter for aerial footage of news stories and traffic reporting.
* Production and delivery of programming. Two stations can enter into
an agreement wherein one station produces another station's local
news. For example, in West Palm Beach, Florida, E.W. Scripps Company
station WPTV-TV (an NBC affiliate) produces newscasts for Raycom-owned
WFLX (a FOX affiliate) at 7: 00 to 9: 00 a.m., 4: 00 to 4: 30 p.m.,
and 10: 00 to 11: 00 p.m.
* Program acquisition. Stations can enter into an agreement wherein
the licensee or owner of one station can negotiate another station's
affiliation agreement with a broadcast network. For example, one
station group owner told us that it negotiated the renewal of
affiliation agreements at the request of the station owners that it
has agreements with.
* Joint retransmission consent negotiations. A station owner can
contract out its retransmission consent negotiations with MVPDs to
another station owner, meaning that the retransmission consent fees
are handled during one negotiation, despite the fact that the stations
are not owned by the same company. As discussed later in this report,
in March 2014, FCC prohibited such arrangements if they involve two or
more separately owned top-four stations (based on audience share) in
the same market.
* Advertising sales. A licensee or owner of a station can authorize
another station to sell its advertising time.
* Station engineering. One station can provide technical support for
another station. For example, one station can monitor, maintain,
repair, and install another station's technical equipment and ensure
the quality of the other station's on-air technical performance.
* Office services. One station can provide back office services for
another station, such as providing office space, accounting services,
and other general administrative services.
We identified four common types of agreements that may include
combinations of the services described above. In some cases, FCC has
established regulatory definitions for these agreements; in other
cases, it is a common industry term that may be used to characterize
an agreement, but there is no regulatory definition. The services
provided by or shared between stations fall under the following common
types of broadcaster agreements:
* Joint sales agreement (JSA).[Footnote 25] A JSA is an agreement in
which one station is allowed to sell the advertising time for another
station in exchange for a percentage of the advertising revenues, a
flat fee, or some other consideration. For example, stations WEEK-TV
and WHOI-TV in Peoria, Illinois, entered into a JSA agreement in 2009.
According to the agreement, WEEK-TV sells advertising time and
provides other services for WHOI-TV in exchange for a monthly
commission equal to 30 percent of the total amount of net advertising
revenue that WEEK-TV sells for WHOI-TV.
* Local marketing agreement (LMA).[Footnote 26] Also referred to as
time brokerage agreements, LMAs allow one or more parties other than
the station's owner to purchase blocks of time and then provide
programming and sell advertising in that block of time. For example,
in Austin, Texas, KXAN (an NBC affiliate) entered into an LMA with
KNVA, an affiliate of The CW Network. Under the agreement, KXAN
provides news, sports, informational, and entertainment programming to
KNVA. According to the agreement, KXAN's owner (LIN Media LLC) has the
sole right to sell advertising time to be placed in all programming
broadcasted on KNVA and also retains all advertising revenues from the
advertising sales.[Footnote 27] In exchange, KXAN's owner pays KNVA's
owner an annual fee for the duration of the agreement.
* Local news service agreement (LNS). LNSs are agreements in which
multiple stations in a local market share news-gathering resources.
LNSs can include sharing photographers, news helicopters, or satellite
trucks to cover a news event. For example, stations can rely on one
camera crew shared by all participating stations to get footage of a
press conference rather than covering it individually.
* Shared service agreement (SSA). SSA is a broad term that can include
a variety of services. SSAs can include arrangements wherein one
station produces another station's news content and also provides
operational, administrative, and programming support.[Footnote 28] For
example, according to Nexstar Broadcasting Group, Inc.'s comments
filed with FCC in 2012, Mission Broadcasting Inc. paid Nexstar
approximately $7.2 million for producing more than 7,400 hours of
local news on 12 of its stations, and also for engineering,
accounting, and other back office administrative assistance provided
under the parties' SSAs.
The various services provided by and shared between stations mentioned
above fall under the four common types of broadcaster agreements (see
table 1). Stations may have several agreements in place, such as an
SSA and JSA, or a single agreement that includes components typical of
different types of agreements. For example, according to a March 5,
2012, filing from the Coalition to Preserve Local TV Broadcasting,
Fort Wayne, Indiana, stations WISE-TV and WPTA (TV) operated under a
JSA and SSA agreement; WISE-TV provides news programming, sales, and
other back office services for WPTA (TV) and both stations transmit
from the same tower. Stakeholders told us that some companies have
relationships through which one company enters into a series of
broadcaster agreements to allow another company to provide the
services for most of its stations. For example, as mentioned above,
Mission Broadcasting, Inc. typically enters into broadcaster
agreements with Nexstar Broadcasting Group, Inc.
Table 1: Common Types of Services Provided under Different Broadcaster
Agreements:
Service: Sharing of news resources (e.g., cameras, helicopter);
Agreements:
Joint sales agreement: [Empty];
Local marketing agreement: [Empty];
Local news service agreement: [Check];
Shared service agreement: [Check].
Service: Program production;
Agreements:
Joint sales agreement: [Empty];
Local marketing agreement: [Check];
Local news service agreement: [Check];
Shared service agreement: [Check].
Service: Program acquisition;
Agreements:
Joint sales agreement: [Empty];
Local marketing agreement: [Check];
Local news service agreement: [Empty];
Shared service agreement: [Check].
Service: Advertising sales;
Agreements:
Joint sales agreement: [Check];
Local marketing agreement: [Check];
Local news service agreement: [Empty];
Shared service agreement: [Empty].
Service: Station engineering;
Agreements:
Joint sales agreement: [Empty];
Local marketing agreement: [Empty];
Local news service agreement: [Empty];
Shared service agreement: [Check].
Service: Office (e.g., accounting);
Agreements:
Joint sales agreement: [Empty];
Local marketing agreement: [Empty];
Local news service agreement: [Empty];
Shared service agreement: [Check].
Source: GAO analysis based on interviews with stakeholders and
document reviews. GAO-14-558.
Note: While the regulatory definition of a joint sales agreement
focuses on the sale of advertising, these agreements have been written
to include the provision of other services, such as programming or
technical services.
[End of table]
While Data Are Limited on the Number and Nature of Broadcaster
Agreements, Stakeholders Report That Agreements Are Becoming More
Prevalent:
Data Limitations:
FCC officials and industry representatives were unable to identify a
central data source that tracks all broadcaster agreements. According
to FCC officials, the Commission does not track or have a central data
source on the number of agreements, the stations involved, or services
provided through the agreements. Stations are required to disclose and
file certain types of agreements with FCC, but not all agreements. In
particular, FCC regulations require stations to file JSAs and LMAs in
their public inspection files to provide the local community with
information on stations' programming and operations.[Footnote 29] In
addition, if one station uses an LMA to provide more than 15 percent
of the programming hours for another same-market station, FCC requires
the stations involved to file that agreement with the Commission.
[Footnote 30] In April 2014, FCC released an order requiring that
stations file copies of JSAs with the Commission if the JSA involves
one entity's selling more than 15 percent of another same-market
station's weekly advertising time.[Footnote 31] There are no similar
filing requirements for SSA and LNS agreements. However, in April
2014, FCC requested comments on whether it should require stations to
disclose SSAs.[Footnote 32] Station owners must submit copies of all
their agreements when they file an application for a license
assignment or transfer, which typically occurs with a merger or
acquisition, and they must describe any agreements or contracts in
their biennial ownership reports submitted to FCC; however, this would
not include SSAs or LNSs.
Some stakeholders have attempted to track the number and nature of
these agreements; however, these studies have limitations and do not
cover all the types of agreements. For example, BIA/Kelsey surveys
station personnel and reviews press releases to collect data on the
number of JSA and LMA agreements, but it does not track SSA or LNS
agreements.[Footnote 33] In addition, other stakeholders have reported
on the number of DMAs in which stations have an agreement, but the
findings of such reports have varied as the studies used different
methodologies. For example, some studies identified agreements by
searching publicly available documents while others contacted stations
or MVPDs directly.
Prevalence of Agreements:
Based on the JSA and LMA data available from BIA/Kelsey and from our
interviews with industry representatives, broadcaster agreements
appear to be less prevalent in large markets. In particular, while 4
percent of stations in the largest 25 DMAs participated in a JSA or
LMA, or both, in February 2014, 20 percent of the stations in DMAs
ranked 101 through 150 based on size participated in these agreements
(see table 2 below).[Footnote 34]
Table 2: Percentage of Full-Power Commercial and Satellite Stations
with a Joint Sales Agreement (JSA) or Local Marketing Agreement (LMA),
or Both, by Designated Market Area (DMA), as of February 6, 2014:
DMAs (ranked from largest to smallest): 1-25;
Percentage of full-power commercial stations with a JSA or LMA, or
both: 4%.
DMAs (ranked from largest to smallest): 26-50;
Percentage of full-power commercial stations with a JSA or LMA, or
both: 12%.
DMAs (ranked from largest to smallest): 51-100;
Percentage of full-power commercial stations with a JSA or LMA, or
both: 16%.
DMAs (ranked from largest to smallest): 101-150;
Percentage of full-power commercial stations with a JSA or LMA, or
both: 20%.
DMAs (ranked from largest to smallest): 151-210;
Percentage of full-power commercial stations with a JSA or LMA, or
both: 12%.
Source: GAO analysis of BIA/Kelsey data. GAO-14-558.
Note: The data do not include shared service agreements or local news
service agreements and multicast channels (multiple channels aired by
a single broadcast station). Satellite stations, as defined by BIA/
Kelsey, are full power commercial stations that rebroadcast the same
programming as a main station in the same market or an adjacent
market, but may also have staff on site for the production of local
news broadcasts.
[End of table]
Broadcasters and financial analysts told us that one factor
contributing to the greater use of agreements in small to medium
markets is that stations in these markets receive less advertising
revenue than stations in large markets. The Pew Research Center's
analysis of BIA/Kelsey data shows that in 2011, stations in the
largest 25 local television markets had average revenues substantially
greater than stations in smaller markets.[Footnote 35] In particular,
stations in the largest 25 DMAs received, on average, advertising
revenues of $57 million per year, while stations in DMAs ranked 151
through 210 according to size received $3 million (see table 3).
However, the costs of broadcasting (cameras, vehicles, bandwidth,
monitors, and other production infrastructure) can be similar across
small and large markets. Thus, broadcasters in small-and medium-sized
markets are more likely to enter into agreements to share or reduce
costs.
Table 3: Average Local Television Stations' Revenue by Designated
Market Area (DMA) in 2011:
DMAs (ranked from largest to smallest): 1-25;
Average local television stations' revenue: $57 million.
DMAs (ranked from largest to smallest): 26-50;
Average local television stations' revenue: $21 million.
DMAs (ranked from largest to smallest): 51-100;
Average local television stations' revenue: $11 million.
DMAs (ranked from largest to smallest): 101-150;
Average local television stations' revenue: $6 million.
DMAs (ranked from largest to smallest): 151-210;
Average local television stations' revenue: $3 million.
Source: Pew Research Center 2013 State of the Media Report's analysis
of BIA/Kelsey data. GAO-14-558.
Note: Advertising comprises the bulk of a station's revenue.
[End of table]
Stakeholders also noted that stations in small and medium markets may
be more likely to enter into agreements because FCC's ownership rules
disproportionately affect stations in these markets. Specifically, as
mentioned previously, FCC rules allow a single entity to own two
television stations in the same DMA if at least one of the stations is
not ranked among the top four stations in terms of audience share and
at least eight independently owned and operating full-power television
stations would remain in the DMA. Small markets are less likely to
have enough stations to meet these requirements. For example, the
smallest market with 9 or more stations, which could support a merger,
is the Spokane, Washington, market.[Footnote 36] Thus, stations in
smaller markets may use broadcaster agreements to gain operating
efficiencies that they cannot obtain through common ownership.
According to FCC and industry representatives, agreements are being
used more often in recent years. Station owners and financial analysts
noted that factors driving the use of agreements include declining
advertising revenues and an increase in station acquisitions and
mergers, as described below.
* Advertising revenues. The average advertising revenue for stations
fell during the 2007-2009 recession, and has not returned to pre-
recession levels. Station owners stated that this was part of a long-
term trend of declines in advertising revenues for local television
stations and attributed it to increasing competition in recent years
for viewers and advertisers from cable and non-traditional media
outlets, such as Facebook. The average over-the-air local television
station's advertising revenue has decreased 10 percent from 2004 to
2012.[Footnote 37] According to industry representatives, some
stations are entering into agreements to help reduce operating costs
to offset the dilution of advertising revenue. However, some consumer
groups have argued that the recent decline in advertising revenues is
the result of the recession and that advertising revenue has been on
the rise since the recession ended in 2009. Specifically, between 2009
and 2012, average over-the-air advertising revenues have increased 28
percent. Consumer groups have also noted that other factors have
improved station value, such as increased political advertising and a
growth in retransmission consent fees. FCC sought comment on issues
related to stations' competition for audience share and advertising
revenue in 2014.[Footnote 38]
* Station acquisitions and mergers. In some instances, agreements are
components of a larger transaction, such as an acquisition or merger.
According to the Pew Research Center, in 2013, there were a large
number of mergers and acquisitions in the television broadcast
industry; the number of acquisitions of full-powered local stations
increased from 95 acquisitions representing $1.9 billion in 2012 to
290 acquisitions representing $8.8 billion in 2013. During a merger or
acquisition, stations may enter into agreements that allow them to
share services and gain efficiencies while still avoiding violating
FCC's ownership rules that limit the number of media outlets an entity
can own or control locally and nationwide. For example, as depicted in
figure 2, when Gannett acquired Belo's television stations in 2013, it
entered into broadcaster agreements for stations that were located in
markets where Gannett already owned newspapers or stations and was
thus prohibited from taking ownership of those stations through the
merger. In one of the affected markets, Louisville, Kentucky, Gannett
owns The Courier Journal, a newspaper; to avoid violating FCC's cross-
ownership rules, Gannett sold the newly acquired Belo station, WHAS-
TV, in Louisville, to Sander Operating Co. and entered into agreements
so that Gannett would handle all ad sales and provide local news for
the station.
Figure 2: Example of a Merger-Generated Shared Service Agreement:
[Refer to PDF for image: illustration]
Pre-merger:
Gannett: Owner of The Courier Journal;
Belo: Owner of WHAS-TV;
Both serve Local households.
Merger:
Gannett acquires Belo:
* To avoid violating FCC's cross-ownership rules, Gannett sold WHAS-TV
to Sander Operating Co.
* Gannett then entered into agreements with Sander Operating Co. to
provide advertising sales and local news for WHAS-TV.
After merger:
Gannett: Owner of The Courier Journal;
Sander Operating Co.: New owner of WHAS-TV.
Agreement:
Gannett provides Sander Operating Co. with all advertising sales and
local news programming support for WHAS-TV;
Both serve Local households.
GAO analysis of Federal Communications Commission document.
[End of figure]
Stakeholders Have Mixed Views on the Effects of Broadcaster Agreements
on Television Programming and the Subscription Video Industry:
Programming:
In filings with FCC and interviews with us, consumer groups and labor
representatives raised concerns that some broadcaster agreements
negatively affect local news programming. In particular, these groups
stated that agreements in which news resources are shared or
outsourced can lead to duplicative content in local newscasts. In
reports created or commissioned by consumer and labor groups,
researchers have identified stations involved in broadcaster
agreements using the same reporter, anchor, scripts, video, or
graphics. The extent to which such resources are shared varies with
each agreement, but one case highlighted by consumer and labor groups
is an SSA between three stations in Honolulu, Hawaii, that resulted in
consolidated news operations and the stations' airing identical
coverage of a local election. Consumer groups have also filed comments
with FCC stating that the use of broadcaster agreements leads to less
diversity in programming and may negatively affect minority ownership
by allowing companies to circumvent media ownership restrictions. For
example, in comments filed with FCC, a consortium of consumer groups
stated that SSAs may reduce opportunities for minority and women
entrants to acquire stations by allowing struggling stations to avoid
the requirements for a failed station waiver.[Footnote 39]
Station owners counter that these agreements do not necessarily lead
to duplicative local news programming and can, in fact, better serve
residents by providing news at different times. Station owners and a
trade association representative explained that even if two stations
in the same market are jointly owned or controlled, the local news on
each station will differ, because each station needs to draw viewers
from different audiences. For example, one station owner told us that
providing the exact same newscast on two different stations can lead
to a cannibalization of both stations' audience ratings, advertising
revenues, and profits, so it is in the stations' self-interest to
maintain separate identities and target different audiences. Station
owners also noted that agreements can be used to air news at different
times of day. For example, some station owners told us that a local
FOX-affiliated station may enter into an agreement to have a newscast
produced by the local ABC-, CBS-, or NBC-affiliated station, meaning
that the FOX station can air news at 10: 00 p.m., while the other
station airs its news at 11: 00 p.m.[Footnote 40]
In addition, broadcasters, station owners, and the financial analysts
we interviewed told us that agreements can result in economic
efficiencies that are needed in certain cases to allow a station to
continue providing any news at all. They added that the agreements
have also provided localism and diversity benefits by allowing some
stations that previously did not provide news to begin doing so, or to
add additional local programming. For example, in Wichita Falls,
Texas, Nexstar's NBC station provides services that allowed the FOX
station, which previously did not air local news, to air a 9: 00 p.m.
newscast. Similarly, a trade association told us that a JSA and SSA
between stations owned by Schurz Communications Inc. and Entravision
Holdings LLC resulted in the launch of Spanish-language news on a
station in Derby, Kansas, making it the first and only Spanish-
language local television news operation in the state. In our six case-
study markets, some station owners who had not entered into agreements
stated that this was because their station was strong economically and
did not need an agreement.
Subscription Video Industry:
MVPDs voiced concerns about the impact of broadcaster agreements on
the subscription video industry. In some cases, stations involved in
broadcaster agreements enter into joint negotiations with MVPDs
regarding the retransmission consent fee the MVPDs will pay to carry
the stations. We heard of two ways in which joint retransmission
negotiations may occur:
* Two or more separately owned stations located in the same market
enter into an agreement in which they are represented by one
negotiator who negotiates the retransmission consent fees for the
separately owned stations at once.
* In the case of large station groups, the company may represent all
of its stations, as well as all of the stations it operates via
broadcaster agreements, during the negotiations.
MVPDs opposed the use of joint negotiations by separately owned
broadcast stations, particularly when the negotiations included
multiple top-four stations (typically ABC, CBS, FOX, and NBC) in one
market. MVPDs noted that the increased risk of losing more than one of
the top-four stations in a given market gives the negotiating stations
more leverage over the MVPDs. MVPDs said that the increased leverage
can lead to higher retransmission consent fees that could be passed on
to consumers.
Station owners and two of three financial analysts we interviewed
counter that MVPDs overstated the extent to which joint negotiation of
retransmission consent affects the final retransmission consent fee,
and identified other factors affecting retransmission consent
negotiations.[Footnote 41] For example, we were told that in cases in
which a broadcaster or station group owns multiple stations, the MVPD
and station owner negotiate the retransmission consent terms for all
of the owner's stations across multiple geographic markets. Station
owners and MVPDs both noted that in such a negotiation, the amount of
leverage each party--the station owner and MVPD--has depends on the
overlap in the stations' audience size and the number of MVPD
subscribers. For example, one MVPD stated that if a station group owns
stations in 70 percent of the MVPD's service area, then the station
group has more leverage because a programming blackout would affect a
large percentage of the MVPD's subscribers than would be the case if
the station group only covered 10 percent of the MVPD's service area.
Comprehensive data are not available to evaluate the effect of
broadcaster agreements on retransmission consent fees, but FCC
recently took action to prohibit separately owned top-four stations in
the same market from engaging in joint retransmission consent
negotiations. Broadcasters and MVPDs have each submitted economic
studies to FCC supporting their positions, and a few individual MVPDs
provided data to FCC on how joint retransmission consent negotiations
affected their retransmission consent fees. However, comprehensive
data on the extent to which these agreements affect retransmission
consent fees are not available, because retransmission consent fee
negotiations are subject to non-disclosure agreements. Moreover, even
if the retransmission consent fees were publicly available, as we
noted earlier, it is not always known when stations are involved in a
broadcaster agreement. On March 31, 2014, FCC adopted an order
prohibiting separately owned, top-four stations in the same market
from entering into joint retransmission consent negotiations with one
another, or otherwise collaborating during retransmission consent
negotiations.[Footnote 42] In the order, FCC concluded that joint
negotiation by same market, separately owned top-four stations
eliminates price rivalry between and among stations that otherwise
would compete directly for carriage on MVPD systems and the associated
retransmission consent revenues. FCC added that joint negotiation
gives such stations both the incentive and the ability to impose on
MVPDs higher fees for retransmission consent than they otherwise could
impose if the stations conducted negotiations for carriage of their
signals independently.
DOJ took action in 1996 when three companies, each owning a network
affiliate in Corpus Christi, Texas, agreed not to enter into a
retransmission consent agreement with any cable operator until the
operator had reached an agreement with all three companies. In the
complaint, DOJ stated that the effect of this combination was to
increase the price of retransmission consent and to restrain
competition among the defendants in the sale of retransmission
rights.[Footnote 43] DOJ officials told us that in this case, the
companies were not involved in any other agreements, such as SSAs, and
if they had been, DOJ would have evaluated whether there were
efficiencies derived from the agreements that would have balanced
against the anticompetitive effects.
FCC Has Not Completed a Review of the Use and Impacts of Broadcaster
Agreements:
FCC Evaluates Individual Broadcaster Agreements as Part of Its Review
of Mergers and Acquisitions:
FCC's recent regulatory approach has been to evaluate broadcaster
agreements that occur as part of a merger or acquisition, and propose
specific remedies as needed for individual cases.[Footnote 44] When
merging or acquiring stations, companies must obtain FCC approval to
transfer the station licenses. As previously noted, companies may
enter into broadcaster agreements during the course of a merger or
acquisition if the newly acquired stations present ownership
combinations that violate FCC's ownership rules. For example, in July
2013, FCC began a proceeding to review Tribune Broadcasting Company
II's acquisition of 17 stations owned by Local TV Holdings. Since
Tribune already owned newspapers in two of the markets served by Local
TV's stations and would thus be prohibited under existing FCC rules
from acquiring the stations, the acquisition included a provision
transferring the licenses of those two stations to Dreamcatcher
Broadcasting. The paperwork filed with FCC explained that Tribune
would then enter into SSAs to provide technical, back-office,
promotional (website), retransmission consent, and programming
services to the Dreamcatcher stations. In the order approving the
acquisition and corresponding agreements, the Media Bureau noted that
the provisions of the arrangements were similar to agreements that it
had approved in the past, and the agreements did not implicate its
attribution rules, which are discussed below.[Footnote 45]
FCC's review of agreements that occur as part of a merger or
acquisition involves determining if the agreements constitute (1) an
attributable interest that should be counted under an entity's
ownership cap and (2) an unauthorized transfer of control of the
station. In addition, as previously noted, when reviewing an
application for a license assignment or transfer, FCC must consider
whether the transaction serves the public interest, as required by the
Communications Act.[Footnote 46]
Attributable Interests:
FCC reviews sharing agreements to determine if they constitute an
attributable interest that should be counted under a licensee's
ownership cap. As mentioned earlier, the broadcast attribution rules
define which financial or other interests in a licensee that must be
counted in applying the broadcast ownership limits. FCC's attribution
rules and corresponding notes provide guidance to identify interests
that create sufficient degrees of influence in other licensees'
stations.[Footnote 47] For example, when an entity programs more than
15 percent of a same-market station's weekly programming hours or
sells more than 15 percent of a same-market station's weekly
advertising time, it is deemed to have an attributable interest.
Station owners told us, therefore, that they write agreements to avoid
implicating the attribution rules.
Transfer of Control:
Some broadcaster agreements have been challenged by consumer groups,
competing stations, and MVPDs on the grounds that they either raise
attribution issues or amount to an unauthorized transfer of control,
given the functions that a station may cede to another station. For
example, consumer groups have stated that agreements in which one
company provides the studio, production facilities, tower, and local
news for another company's station, while also controlling the sale of
advertisements and entering into agreements such as securing the
station's debt or receiving a percentage of the station's profits,
result in the station owner ceding control of the station to another
party.
FCC has previously stated that its analysis of transfer of control
"transcends formulas" and must be determined on a case-by-case basis.
[Footnote 48] FCC evaluates the following factors when determining who
controls a station:
* Programming: Licensees must maintain ultimate control over their
station's programming. Licensees may accomplish this by including
contractual language providing that the licensee retains the ultimate
authority over the selection and procurement of programming.
* Personnel: FCC requires licensees to have at least one managerial
and one nonmanagerial employee at their stations, thus maintaining a
"meaningful staff presence" as required by the Commission's main
studio rule.[Footnote 49] As long as the licensee meets this
requirement and retains ultimate control of station operations
pertaining to personnel responsibilities, the station providing
services can place its employees at the station receiving the
services. For example, FCC officials told us that if another station's
employees are performing work related to functions the licensee of the
station receiving services should control, then the employees should
report to the licensee's managers.
* Finances: Payment for services rendered in broadcaster agreements
may factor into a case-by-case determination of financial control. FCC
officials noted that ultimate authority for all aspects of a station's
financial operations must rest with the licensee, and FCC's analysis
of control may consider payments for services. For example, FCC has
previously approved agreements in which the licensee of the station
receiving services retained 70 percent of cash flow resulting from
operation of the licensee's station. FCC has also approved previous
agreements where a flat fee for services rendered, as part of a shared-
service agreement, was combined with a split of advertising revenue.
FCC has previously held that participation in an agreement does not
necessarily establish a transfer of control, even if the agreement
constitutes an attributable interest that should be counted under the
ownership cap.[Footnote 50] The licensee can delegate responsibility
over a station as long as the licensee sets basic policy and retains
ultimate control over the station. While there are some provisions
codified in regulation, stakeholders told us that they typically use
previously approved agreements as precedence on how to structure
agreements so that they will garner FCC approval. However, in March
2014, the Media Bureau issued a notice stating that it would closely
scrutinize applications for the assignment or transfer of a license
that propose that two or more stations in the same market will (1)
enter into an arrangement to share facilities, employees, or services
or to jointly acquire programming or sell advertising and (2) enter
into certain financial agreements, such as loan guarantees or options
to purchase the station.[Footnote 51] In explaining this notice, the
Media Bureau cited concerns that such arrangements may weaken the
economic incentive of licensees to control programming for their
stations.
FCC Has Not Completed a Review of the Use and Impacts of Broadcaster
Agreements:
Station owners and consumer groups both told us that the media
ownership rules have influenced the development of broadcaster
agreements. Station owners told us that by limiting the number of
stations an entity can own in a local market, the media ownership
rules have led companies to enter into broadcaster agreements as a
means of realizing economic efficiencies that they are unable to
achieve through acquisitions. Consumer groups have raised concerns
that the use of such agreements constitutes an "end-run" around the
media ownership rules because they amount to common ownership of two
stations in the same market. While both groups recognize the
relationship between the media ownership rules and broadcaster
agreements, each group proposes differing solutions. For example,
station owners note that the agreements are not as efficient as joint
ownership and state that the media ownership rules should be relaxed
due to the increasing competition that broadcast stations face from
new media, such as Internet-delivered programming. Conversely,
consumer groups want the agreements made attributable due to concerns
that they increase media consolidation and reduce viewpoint diversity.
Similarly, in February 2014, DOJ filed comments with FCC noting that
there has been a pronounced trend in broadcaster agreements that allow
one station to control another station that is nominally owned by a
separate entity, often called a "sidecar." DOJ stated that its
investigations have revealed that these "sidecars" often exercise
little or no competitive independence from the station providing
services and that the extent of cooperation and integration with
"sidecars" is so extensive that some television-station ownership
groups even consolidate the financials of affiliated "sidecars" in
their securities filings.[Footnote 52]
FCC has stated that it is unable to determine the extent to which
broadcaster agreements affect its media ownership rules and policy
goals of competition, localism, and diversity. In 2014, FCC noted that
public interest groups had raised meaningful concerns about the impact
of agreements on its policy goals, but also stated that broadcast
stakeholders had provided evidence that agreements may produce public
interest benefits. FCC concluded that it lacked information about the
scope and prevalence of broadcaster agreements and, thus, could not
conduct a thorough analysis of the impact of the agreements on its
rules and policy goals. Yet federal standards for internal control,
which provide the overall framework for identifying and addressing
major performance and management challenges, note the importance of
obtaining information from external stakeholders that may have a
significant impact on an agency achieving its goals.[Footnote 53]
To some extent, this uncertainty exists because FCC has not collected
data or completed a review to understand how broadcaster agreements
are being used and the potential impacts with respect to its media
ownership rules and the corresponding policy goals of competition,
localism, and diversity. Specifically, FCC has not collected
comprehensive data to determine the number of agreements, the services
provided through the agreements, and other relevant data to provide
useful context, such as the market and station characteristics
associated with the use of agreements. FCC has instead relied on
comments from stakeholders on these issues and its experience
reviewing individual transactions. As part of its 2010 Quadrennial
Review of its ownership rules, FCC requested comment on making LNSs
and SSAs attributable, and on how to determine the impact of such
agreements on its policy goals of competition, localism, and
diversity,[Footnote 54] but it has not completed the review. FCC
continued its assessment of these issues in its 2014 Quadrennial
Review. Specifically, FCC's notice for its 2014 Quadrennial Review
stated that it needed additional information to assess whether
additional regulation of agreements is warranted, and solicited
comments on requiring the disclosure of SSAs, tentatively defining the
term in a manner that would include LNS agreements.[Footnote 55] In
the 2014 notice, the Chairman indicated that he instructed the Media
Bureau to complete the review by June 30, 2016.
The lack of comprehensive data and the long delays in completing FCC's
review makes it difficult to objectively determine the effect of the
agreements on FCC's policy goals of competition, localism, diversity.
Broadcasters, station owners, and consumer groups have provided
counterarguments about the effect of broadcaster agreements on FCC's
media ownership rules and its policy goals of competition, localism,
and diversity. FCC has also recognized the benefits and potential
harms associated with these agreements and has approved a number of
agreements that occurred as part of a merger or acquisition. However,
without conducting a fact-based analysis of how agreements are being
used, FCC cannot ensure its current and future policies on broadcaster
agreements serve the public interest.
Conclusions:
Congress and FCC have long recognized the valuable role that local
television stations play in informing citizens, and have adopted rules
and regulations to ensure that broadcasters are serving the public
interest. FCC seeks to achieve competition, localism, and diversity
through its media ownership rules; however, restrictions on local
television station ownership have remained largely unchanged since
1999. Meanwhile, the media marketplace is rapidly evolving and
offering consumers a variety of platforms for receiving information
and programming, including a number of Internet-based sources. This
has led to increased competition between broadcast stations and other
media platforms for viewers, content, and advertising. In addition,
broadcaster agreements appear to be increasing and evolving with
respect to the types of services provided. While few disagree that
broadcaster agreements have evolved partly in response to FCC's
restrictions on media ownership, broadcast stations and consumer
groups offer varying perspectives on whether the agreements positively
or negatively affect FCC's policy goals of competition, localism, and
diversity.
FCC has recognized both sides of the issue, noting that broadcaster
agreements can provide important public interest benefits, such as
helping a struggling station improve its operations and adding local
news programming in a market, but these agreements can also create
relationships that would be viewed as joint ownership under FCC's
existing regulations. FCC has also recognized that in certain
circumstances, its policy goals of competition, localism, and
diversity may conflict, such as in cases where preventing
consolidation leads to less economically healthy stations that cannot
invest in local news. Given the complexity of regulating an evolving
industry, FCC would benefit from improved data on and analysis of the
extent to which broadcaster agreements affect its media ownership
rules and its media policy goals of competition, localism, and
diversity. However, FCC has not completed a study of and lacks basic
data on broadcaster agreements. This lack of analysis and information
could undermine FCC's efforts to ensure its media ownership
regulations achieve their intended goals.
Recommendation for Executive Action:
FCC should determine whether it needs to collect additional data to
understand the prevalence and context of broadcaster agreements. FCC
should also evaluate whether broadcaster agreements affect its media
policy goals of competition, localism, and diversity.
Agency Comments:
We provided a draft of this report to FCC for review and comment. In
written comments, reproduced in appendix II, FCC agreed with our
recommendation. FCC also noted that it has taken initial steps to
address the recommendation. In particular, FCC noted that in the 2014
Quadrennial Review, it proposed defining a category of sharing
agreements and requiring their disclosure.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the
Chairman of the Federal Communications Commission and the appropriate
congressional committees. In addition, this report will be available
at no charge on GAO's website at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made key contributions
to this report are listed in appendix III.
Sincerely yours,
Signed by:
Mark Goldstein:
Director, Physical Infrastructure:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives of this report were to examine (1) the uses and
prevalence of broadcaster agreements in the television industry; (2)
stakeholders' views on the effects of broadcaster agreements on
programming and the subscription video industry; and (3) the extent,
if at all, that the Federal Communications Commission (FCC) has
regulated these agreements.
To assess how broadcaster agreements are used in the television
industry, we first identified the different types of broadcaster
agreements through a literature search and review of prior GAO
reports, academic studies, industry and advocacy reports, and media
articles. We also reviewed the descriptions and definitions of
broadcaster agreements provided in FCC regulations and rulemakings. We
obtained specific examples of agreements from filings submitted to FCC
by broadcasters, station owners, and public-interest groups, as well
as descriptions of agreements reported by station owners in press
releases, and U.S. Securities and Exchange Commission 10-K and 10-Q
filings. We verified information from the literature review through
interviews with FCC and Department of Justice (DOJ) officials. We also
interviewed a variety of stakeholders, including representatives of
broadcast networks, television broadcast station owners, multichannel
video programming distributors (MVPDs),[Footnote 56] trade
associations, labor groups, consumer groups, financial analysts, and
other individuals with knowledge of the broadcast industry. We
selected local television station owners and MVPDs that filed comments
in FCC's media ownership proceeding and that varied in the number of
stations they owned or the number of subscribers they served,
respectively; we selected other stakeholders by reviewing prior GAO
reports, academic studies, and comments filed in FCC media ownership
proceedings, and through recommendations from other interviewees.
We conducted case studies to understand how agreements were used in
specific markets and obtain the perspective of station owners in those
markets. We conducted case studies of six designated market areas
(DMAs), three markets with stations using broadcaster agreements and
three markets in which the stations did not use broadcaster
agreements. To select the case study DMAs, we used a stratified random
sample. We obtained the 2013-2014 list of DMAs from Nielsen Media
Research's website. We eliminated the top 25 DMA markets because
stakeholders told us that broadcaster agreements are less common in
those markets and likely to have less impact in those markets. We
divided the remaining markets into three separate groups based on
market size. We randomly ordered the markets within each stratum and
selected the first DMA listed in each of the three stratums to conduct
the case study. If there was a broadcaster agreement in the selected
market, we then matched it with a similarly-sized market without an
agreement, and if a chosen market did not have a broadcaster
agreement, we looked for a similarly-sized market with an agreement.
To determine whether stations in a market participated in a
broadcaster agreement, we used the Warren Television and Cable
Factbook, FCC's website, stations' public inspection files, and a
BIA/Kelsey database to identify full-power commercial and non-
commercial stations within each DMA. We then used the above-mentioned
sources, press releases, news articles, a Georgetown University study,
a University of Delaware study, and data from MVPDs, to identify
whether any broadcaster agreements exist within the three selected
markets.
After the 6 case study markets were selected, we contacted and
interviewed station owners to learn more about the specific
broadcaster agreements being used in the selected DMA. In addition, we
contacted cable companies in the DMAs we identified having agreements
to learn more about how or if the broadcaster agreements within their
respective DMAs affected the retransmission consent fee negotiations.
In the DMAs we identified as not having an agreement, we contacted and
interviewed owners of the top-four stations in the market. We defined
a broadcaster agreement as any instance where two or more
independently owned stations within the same DMA have entered into any
of the following agreements: time brokerage agreement/local marketing
agreement, shared service agreement, joint sales agreement, and local
news service agreement. We did not include instances where a station
entered into a broadcaster agreement with another separately-owned out-
of-market station because we focused on FCC's local ownership rules,
which limit the number of stations a company can own within a market.
In addition, we did not include low power or translator stations, but
we did include satellite stations. The three DMAs that we selected
that had a broadcaster agreement were Casper-Riverton, Wyoming,
Topeka, Kansas, and Paducah, Kentucky.[Footnote 57] The three DMAs we
selected that did not have a broadcaster agreement were Mankato,
Minnesota, Columbia-Jefferson City, Missouri, and Madison, Wisconsin.
[Footnote 58]
To assess what is known about the prevalence of broadcaster
agreements, we interviewed stakeholders about the comprehensiveness of
data collected by FCC, private-sector, public-interest, and academic
sources on the number of broadcaster agreements nationwide. In
addition, we acquired data from BIA/Kelsey, a market-research firm, to
assess the prevalence of certain types of agreements, the stations
involved in the agreements, and the size of the market served by the
stations. We analyzed BIA/Kelsey data on television markets, stations,
and agreements. We tested the reliability of BIA's data by reviewing
stakeholder opinions on the reliability and accuracy of the data,
reviewing existing information about the data, and obtaining
information from BIA officials about how they collect the data. We
found the data sufficiently reliable for our purposes. We also
examined FCC regulations and interviewed FCC officials to understand
the extent to which broadcasters are required to disclose broadcaster
agreements and the methods for doing so.
To determine stakeholders' views on the effects of broadcaster
agreements on programming and the subscription video industry, we
reviewed FCC dockets and interviewed representatives of broadcast
networks; local television station owners; cable, satellite, and other
subscription video service providers; trade associations; labor
groups; consumer groups; financial analysts; and other individuals
with knowledge of the broadcast industry to obtain their views and
identify any supporting studies and data on the effects of broadcaster
agreements. We also conducted literature reviews to identify any
relevant studies on the effects of broadcaster agreements.
To determine the extent to which FCC has regulated broadcaster
agreements, we reviewed relevant FCC dockets and rulings and
interviewed FCC officials. In addition, we interviewed the previously
mentioned stakeholders to gain their perspective on the extent to
which broadcaster agreements affect FCC's policy goals.
We conducted this performance audit from July 2013 to June 2014 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusion based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Federal Communications Commission:
Federal Communications Commission:
Washington, D.C. 20554:
June 13, 2014:
Mr. Michael Clements:
Assistant Director:
Government Accountability Office:
441 G St., NW:
Washington, DC 20548:
Dear Mr. Clements:
Thank you for the opportunity to respond to the Government
Accountability Office (GAO) Draft Report entitled FCC Should Review
the Effects of Broadcaster Agreements on Its Media Policy Goals, GA0-
14-558, which reviews issues related to broadcaster agreements between
local television stations.
Given the increasing use of sharing agreements by broadcast licensees,
we agree with the GAO recommendation of seeking additional data,
especially that which would allow the Commission to study the impact
of such agreements on the policy goals of competition, localism and
diversity. As is noted in the Draft Report, the Commission has already
taken its initial steps in such an endeavor. In the 2014 Quadrennial
Review of media ownership rules, the Commission proposed defining a
category of sharing agreements and requiring their disclosure. The
Commission made this proposal as a means to enable a better
understanding of the terms, operation, and prevalence of sharing
agreements. Disclosure would allow the Commission, and the public, to
review these agreements and to better understand the impact of such
arrangements on the Commission's rules and policy goals. The comment
period for the 2014 Quadrennial Review runs until July 7, 2014. Reply
Comments must be submitted no later than August 4, 2014.
While the record for the 2014 Quadrennial Review is being developed,
the Commission will continue to consider broadcaster agreements, in
appropriate cases, in deciding whether approval of particular proposed
transactions will serve the public interest.
Thank you for the opportunity to respond to the Draft Report's
recommendations. The agency has begun to implement several of them and
will continue to look for opportunities to do so where appropriate. We
look forward to working with you in the future.
Sincerely,
Signed by:
William T. Lake:
Chief, Media Bureau:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mark L. Goldstein, (202) 512-2834 or goldsteinm@gao.gov.
Staff Acknowledgments:
In addition to the contact named above, Michael Clements, Assistant
Director; Amy Abramowitz; Richard Bulman; Crystal Huggins; Bert
Japikse; Sara Ann Moessbauer; Josh Ormond; Amy Rosewarne; and Rebecca
Rygg made key contributions to this report.
[End of section]
Footnotes:
[1] The three markets that we selected that had a broadcaster
agreement were Casper-Riverton, Wyoming; Topeka, Kansas; and Paducah,
Kentucky. The three markets we selected that did not have a
broadcaster agreement were Mankato, Minnesota; Columbia-Jefferson
City, Missouri; and Madison, Wisconsin. During interviews with station
owners in the Madison, Wisconsin, market, we learned of a broadcaster
agreement in that market. However, as our case studies were selected
as illustrative examples only, the presence of such an agreement does
not pose a methodological limitation to our review.
[2] Syndicated programming is non-network programming or post-network
programming (including reruns, game shows, and daytime talk shows)
that is licensed directly to individual television stations. In the
Matter of Annual Assessment of the Status of Competition in the Market
for the Delivery of Video Programming, ¶ 187, 28 FCC Rcd. 10587-88
(July 22, 2013) (Annual Report).
[3] In contrast, local noncommercial educational stations, such as PBS
affiliates, are owned and operated by a public agency or nonprofit
private foundation, corporation, or association; these stations
generally meet their operating expenses with contributions from
viewers and public-interest foundations, and may receive some
government support. 47 U.S.C. § 397; see, also, 47 U.S.C. § 338(k)(6).
[4] 2013 RTDNA/Hofstra University Survey. RTDNA is a professional
organization serving the electronic news profession. RTDNA members
include local and network news executives, news directors, producers,
reporters, digital news professionals, educators, and students. The
RTDNA/Hofstra University Survey is an annual survey of operating
television stations.
[5] Kenneth Olmstead et al., "How Americans Get TV News at Home," Pew
Research Journalism Project (Oct. 11, 2013), accessed Apr. 25, 2014,
[hyperlink, http://www.journalism.org/2013/10/11/how-americans-get-tv-
news-at-home/].
[6] Katerina Eva Matsa, "Local TV Audiences Bounce Back," Pew Research
Center (Jan. 28, 2014), accessed Apr. 25, 2014, [hyperlink,
http://www.pewresearch.org/fact-tank/2014/01/28/local-tv-audiences-
bounce-back/].
[7] Pew Research Center, "Key Indicators in Media & News," State of
the News Media 2014 (Mar. 26, 2014), accessed Apr. 24, 2014,
[hyperlink, http://www.journalism.org/2014/03/26/state-of-the-news-
edia-2014-key-indicators-in-media-and-news/].
[8] Communications Act of June 19, 1934, § 310, as amended, codified
at 47 U.S.C. § 310 (the Communications Act).
[9] 47 U.S.C. §310(d).
[10] In the Matter of 2014 Quadrennial Regulatory Review - Review of
the Commission's Broadcast Ownership Rules and Other Rules, ¶ 14, FCC
14-28, 2014 WL 1466887, at p. 7 (Apr. 15, 2014) (2014 Quadrennial
Review FNPRM and Report and Order).
[11] 2014 Quadrennial Review FNPRM and Report and Order, ¶ 22, at p.
11.
[12] 2014 Quadrennial Review FNPRM and Report and Order, ¶ 14, at p. 7.
[13] 47 C.F.R. § 73.3555(d).
[14] To measure television viewing, Nielsen Media Research divided the
country into 210 local television markets, also referred to as
designated market areas (DMA). Each DMA consists of all the counties
whose largest viewing share is given to stations of the same market
area.
[15] Alternatively, a single entity can own multiple television
stations in the same market if the stations' signal contours (coverage
areas) do not overlap. 47 C.F.R. § 73.3555(b)(1).
[16] A "failed" station is one that has been dark for at least 4
months or is involved in court-supervised involuntary bankruptcy or
involuntary insolvency proceedings. Under the standard for "failing"
stations, a waiver is presumed to be in the public interest if the
applicant satisfies each of the following criteria: (1) one of the
merging stations has had an all-day audience share of 4 percent or
lower, (2) the financial condition of one of the merging stations is
poor, and (3) the merger will produce public interest benefits. Under
the standard for "unbuilt" stations, a waiver is presumed to be in the
public interest if an applicant meets each of the following criteria:
(1) the combination will result in the construction of an authorized
but as yet unbuilt station and (2) the permittee has made reasonable
efforts to construct the licensed facility and has been unable to do
so. (47 C.F.R. § 73.3555 Note 7 and In the Matter of Review of the
Commission's Regulations Governing Television Broadcasting, ¶ 86, 14
FCC Rcd. 12903, 12941 (1999) (Local TV Ownership Report and Order).
[17] See 1996 Act, § 202(c), as amended by Consolidated Appropriations
Act, 2004, Pub. L. No. 108-199, § 629, 118 Stat. 3, 99.
[18] 47 C.F.R. § 73.3555(c) and (d).
[19] 47 C.F.R. § 73.3555, Notes.
[20] In the Matter of Review of the Commission's Regulations Governing
Attribution of Broadcast and Cable/MDS Interests, ¶ 40, 14 FCC Rcd.
12559, 12580 (1999) (Report and Order).
[21] The must carry rule enables each commercial and noncommercial
television broadcast station to require cable operators in its local
market to carry its signal. 47 U.S.C. § 534(a); 47 C.F.R. § 76.56.
Under the carry-one carry-all provision, any satellite operator that
chooses to serve a particular local area (by carrying an in-market
local station) must also carry upon request the signal of all
television broadcast stations located within the same local market. 47
U.S.C. § 338; 47 C.F.R. § 76.66.
[22] 47 U.S.C. § 325(b); 47 C.F.R. § 76.64.
[23] GAO, Telecommunications: Issues Related to Competition and
Subscriber Rates in the Cable Television Industry, [hyperlink,
http://www.gao.gov/products/GAO-04-8] (Washington, D.C.: Oct. 24,
2003).
[24] 1996 Act, § 202(h), 110 Stat. 56, 111-112, as amended by the
Consolidated Appropriations Act, 2004, § 629, 118 Stat., 99.
[25] See 47 C.F.R. § 73.3555 Note 2k.
[26] See 47 C.F.R. 73.3555 Note 2j.
[27] This agreement was created prior to a 1999 FCC order that made
LMAs attributable if an entity programs more than 15 percent of
another in-market station's weekly programming hours. In the Matter of
Review of the Commission's Regulations Governing Attribution of
Broadcast and Cable/MDS Interests, ¶ 55, 14 FCC Rcd. 12585.
[28] In 2014, as part of a proposal to require the disclosure of SSAs,
FCC requested comment on defining an SSA as any agreement or series of
agreements, whether written or oral, in which (1) a station, or any
individual or entity with an attributable interest in the station,
provides any station-related services, including, but not limited to,
administrative, technical, sales, or programming support, to a station
that is not under common ownership (as defined by the Commission's
attribution rules); or (2) stations that are not under common
ownership (as defined by the Commission's attribution rules), or any
individuals or entities with an attributable interest in those
stations, collaborate to provide or enable the provision of station-
related services, including, but not limited to, administrative,
technical, sales, or programming support, to one or more of the
collaborating stations. FCC concluded that this broad definition would
include LNSs. 2014 Quadrennial Review FNPRM and Report and Order, ¶¶
330, 331, at p. 153.
[29] Broadcast stations are required to maintain a "public file" that
contains information about each station's operations and service. A
station's public inspection file includes a variety of information,
including political time sold or given away, data on ownership of each
station, and active applications each station has filed with the
Commission. 47 C.F.R. § 73.3526.
[30] 47 C.F.R. § 73.3613.
[31] 2014 Quadrennial Review FNPRM and Report and Order, App. 2, ¶¶ 2,
at p. 182-183.
[32] 2014 FNPRM and Report and Order, ¶ 328, at p. 152.
[33] According to our analyses of BIA/Kelsey data, as of February 6,
2014, 71 of 210 DMAs had at least one full-power commercial main or
satellite station participating in a JSA or LMA agreement. Data on SSA
and LNS agreements were not available. BIA/Kelsey defines a satellite
station as a full power commercial station that rebroadcasts the same
programming as a station in the same market or an adjacent market. The
station may have staff on site due to the production of local news
broadcasts. The remainder of the programming comes from the parent
(primary) station.
[34] DMAs are ranked in order of size, with the largest market (DMA 1)
being New York City. Stations in large markets may still enter into
agreements, particularly LNS agreements. For example, NBC and FOX
entered into agreements to share camera crews in some markets,
including Chicago, Dallas, Los Angeles, New York, Philadelphia, and
Washington.
[35] Pew Research Center, "All Market Sizes Lost Revenue on Average in
2011," The State of the News Media 2013 accessed May 2, 2014,
[hyperlink, http://stateofthemedia.org/2013/local-tv-audience-declines-
as-revenue-bounces-back/local-tv-by-the-numbers/24-all-markets-sizes-
ost-revenue-on-average-in-2011/].
[36] Our analysis was based on BIA/Kelsey data on the number of
stations and the corresponding parent company in each market. For the
purposes of our analysis of the number of independent stations in a
market, we did not include stations based in Mexico that also transmit
into U.S. DMAs. In addition, there are markets larger than Spokane,
Washington--such as Baltimore, Maryland--that do not have enough
independently owned stations to support a merger.
[37] The estimates are based on the Pew Research Center's Journalism
Project. The estimates are for over-the-air advertising revenue, do
not include digital or mobile advertising revenue, and are based on
Pew's analysis of BIA/Kelsey data.
[38] 2014 Quadrennial Review FNPRM and Report and Order, ¶¶ 20, 24, at
pp. 9-10, 11-12.
[39] Under 47 C.F.R. § 73.3555 (note 7), a failing station can get a
waiver of the local television limit to sell to an in-market
broadcaster if it can show that the in-market broadcaster is the only
entity willing and able to operate the station. This requirement was
crafted in order to allow opportunities for new entrants, including
minorities and women, to purchase broadcast stations.
[40] The FOX network airs 2 hours of network programming in the
evening whereas ABC, CBS, and NBC air 3 hours. Thus, FOX affiliates
can air their local news an hour earlier than ABC, CBS, and NBC
affiliates.
[41] The third analyst stated that there is disagreement among station
owners regarding the extent to which the number of stations involved
affects leverage in retransmission consent negotiations. He added that
some station owners believe that leverage depends on the strength of a
station's programming.
[42] In the Matter of Amendment of the Commission's Rules Related to
Retransmission Consent, ¶¶ 1, 27, FCC-14-29, at pp. 2, 10-12, 2014 WL
1284562 (March 31, 2014) (Report and Order and FNPRM).
[43] United States v. Texas Television, Inc., No. C-96-64, Competitive
Impact Statement at p. 2 (S.D. Tex. 1996).
[44] FCC's Media Bureau will also review agreements if they are
challenged by an outside party. For example, see In the Matter of
KHNL/KGMB License Subsidiary, 26 FCC Rcd. 16087 (MB. 2011) (Memorandum
Opinion and Order and Notice of Apparent Liability for Forfeiture).
[45] In the Matter of the Applications of Local TV Holdings, LLC, ¶
17, 28 FCC Rcd. 16850, at p. 5 (MB. 2013) (Memorandum Opinion and
Order).
[46] 47 U.S.C. §310(d).
[47] 47 C.F.R. § 73.3555, Notes.
[48] In re Application of Fox Television Stations, Inc., ¶ 154, 10 FCC
Rcd. 8452, 8514 (1995) (Memorandum Opinion and Order).
[49] 47 C.F.R. § 73.1125(a).
[50] See, e.g., In re Application of WGPR,10 FCC Rcd. 8140 (1995)
(Memorandum Opinion and Order), vacated and remanded on other grounds,
Serafyn v. FCC, 149 F3d 1213 (DC Cir., 1998). In the Matter of
Shareholders of Hispanic Broadcasting Corp., ¶ 20, 18 FCC Rcd. 18834,
18843 (2003) (Memorandum Opinion and Order).
[51] Processing of Broadcast Television Applications Proposing Sharing
Arrangements and Contingent Interests, DA 14-330 2014 WL 988647 (MB,
March 12, 2014) (Public Notice).
[52] For example, Sinclair Broadcast Group consolidates the financial
data from several companies, including Cunningham Broadcasting Company
and Deerfield Media.
[53] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999).
[54] In the Matter of 2010 Quadrennial Regulatory Review, ¶¶ 194-208,
26 FCC Rcd. 17489, 17564-17570 (2011) (NPRM).
[55] 2014 Quadrennial Review FNPRM and Report and Order, ¶¶ 325 328-
331 339, at p. 101-107.
[56] MVPD refers to cable operators, satellite providers, and
telecommunications companies that provide subscription video services
to consumers.
[57] One station owner party to broadcast agreements in the Casper-
Riverton DMA declined our request for an interview.
[58] During interviews with the station owners in the Madison,
Wisconsin, market, we learned of a local news service agreement in
that market. However, as our case studies were selected as
illustrative examples only, the presence of such an agreement does not
pose a methodological limitation to our review.
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation, and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the
performance and accountability of the federal government for the
American people. GAO examines the use of public funds; evaluates
federal programs and policies; and provides analyses, recommendations,
and other assistance to help Congress make informed oversight, policy,
and funding decisions. GAO's commitment to good government is
reflected in its core values of accountability, integrity, and
reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's website [hyperlink, http://www.gao.gov]. Each
weekday afternoon, GAO posts on its website newly released reports,
testimony, and correspondence. To have GAO e-mail you a list of newly
posted products, go to [hyperlink, http://www.gao.gov] and select
"E-mail Updates."
Order by Phone:
The price of each GAO publication reflects GAO's actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black
and white. Pricing and ordering information is posted on GAO's
website, [hyperlink, http://www.gao.gov/ordering.htm].
Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537.
Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional
information.
Connect with GAO:
Connect with GAO on facebook, flickr, twitter, and YouTube.
Subscribe to our RSS Feeds or E mail Updates. Listen to our Podcasts.
Visit GAO on the web at [hyperlink, http://www.gao.gov].
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Website: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm];
E-mail: fraudnet@gao.gov;
Automated answering system: (800) 424-5454 or (202) 512-7470.
Congressional Relations:
Katherine Siggerud, Managing Director, siggerudk@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, DC 20548.
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, DC 20548.
[End of document]